In many business sales, the location of the business is in a building with the business owner paying rent. Many leases have obligations to stay on the lease through the term EVEN IF THE BUSINESS IS SOLD and a new owner has primary responsibility to make the lease payments.
Many leases also require there be no subleasing or no subleasing without the building owner’s permission.
These requirements can muddy the water of a transaction. In my routine work with buyers and sellers there is a contingency that prevents closing on the business until the lease matter is resolved to the satisfaction of the buyer. Because of the long term relationship between seller and landlord, it often falls to the seller to secure the lease to the buyer’s specifications. At the same time, the seller is hoping to find a way around the restrictions and exposure she may have once the buyer takes over.
In this article, there are tips to methods to mitigate the exposure of the seller to post-sale lease complications.
If you have had experiences along these lines, do report back on means you have utilized to reduce your exposure. Or, perhaps it is a less happy story.